Every business needs to replace the members of its top management at some point in time. However, only a few organizations invest in succession planning activities, which can play a critical role in enhancing the overall performance efficiency of the top management. Even the top headhunting company in Germany advocates the need for timely succession planning to ensure a smooth transition of power at the top level within an organization. In fact, timely succession planning can prove beneficial for a business in more than one ways. The most important of these benefits are discussed in brief as follows.
Better Understanding Of Talent
Succession planning helps the members of the top management to identify the potential candidates suitable for replacing them long before the transition actually happens. This gives them enough time to understand their skills, competence levels and their ability to take the organization on a path of growth and success. This is not possible with new candidates hired at the last moment.
Mitigating Business Risks
Timely succession planning ensures that responsibilities are gradually passed on to the chosen candidates gradually by the people who need to be replaced. This helps in ensuring the continuity of business processes in an uninterrupted manner even during the actual transition of power. It can further help in boosting the market value of the business besides enhancing investor trust and employee confidence resulting in greater growth and profitability.
Improve The Effectiveness Of Top Management
Given that there is minimal business disruption during power transition at the top levels due to proper succession planning, the overall effectiveness of the management is naturally improved. The members of the top management does not need to invest too much time and effort in getting comfortable with each other before they can focus their energies on business growth.
Sends A Positive Signal Down The Line
Investing in proper succession planning helps to send the right signals to hard working and competent employees working at various levels within the organization. It assures them of getting a fair chance to succeed through their skills, diligence, and determination.
Hinderances In The Path Of Succession Planning
It is quite surprising that despite being aware of the various benefits of succession planning, the top management of most organizations may not approve of it due to the following reasons.
- Many times the members of the top management might not share the same view about the future direction of the business. This might lead them to oppose the idea of identifying any potential candidates, who might endorse a view and vision quite opposite to their own.
- A leading recruitment company Germany believes that the myopic view of the management board of a business organization may also prevent it from investing in succession planning activities. The members of the board may be too selfish to consider the idea of being replaced by someone with better capabilities and skills.
- Many times the boards might also oppose the idea of succession planning as they might actually be ignorant of what it involves. The fear of being judged for their ignorance prevents them from taking this extremely vital step necessary for maximizing business growth and profitability.